Canberra is ahead of the game when it comes to the biggest challenge for new energies

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Energy storage is widely acknowledged as critical to the effective deployment of intermittent renewable energy, especially solar power. In Australia, the government of the ACT (Australian Capital Territory—the country's federal district) is undertaking the second-largest roll-out of household batteries in the world (after Germany), through a programme specifically aimed at boosting energy storage capacity.

It is an innovative programme, in which the government has adopted a funding model that goes a step beyond simply implementing feed-in-tariffs (FIT) to support renewables.

"The contract-for-difference FIT model used by the ACT to support the deployment of large-scale renewables doesn't incentivise generators to optimise their revenue by providing storage capacity at peak times," says Brett Phillips, deputy director general of sustainability and the built environment at the ACT government. "Therefore, a new model of incentivising the uptake of storage was required.

The government now provides grants based on the 'sustained peak output' of the batteries, focusing on their ability to create value by supporting the electricity network during peak demand and times of constraint on the network.

Considerable benefits

Batteries allow households to reduce energy bills by delivering power at peak times—when it is most expensive to buy electricity from the grid. An added bonus of some is that they can provide backup power during an outage.

As well as benefiting individual households, battery storage benefits the ACT's energy grid and saves the territory money by reducing peak demand on its energy network. It also helps ACT avoid the need for expensive network upgrades that are causing energy bills to increase in other parts of Australia's National Electricity Market.

With estimates showing it is possible to save up to $220m through the roll out of battery storage, the ACT government decided to launch what it calls its Next Generation Energy Storage Grants Program. Ultimately the scheme will see the ACT government provide $25m in funding to support the roll-out of 36 MW of distributed battery storage in more than 5000 homes and businesses by 2020.

"The programme will not only allow greater self-consumption of solar PV electricity, but (it will) also provide considerable benefits to distribution network infrastructure, ultimately leading to savings for all ACT electricity users," says Phillips.

Through the Next Generation Renewables Program, the ACT government has a vision for Canberra to become a globally recognised centre for renewable energy innovation and investment. Industry estimates forecast that the global battery storage market will be worth $400bn by 2030 and the ACT government sees its region as an ideal launch pad for national and international businesses wanting to get a head start in this emerging industry.

The ACT is connected to the national energy grid, which runs from Queensland through the eastern states to Tasmania and South Australia. As the location of the renewable energy supply needed to reach the ACT's target is not critical to the territory's emission reduction effect, ACT sources its renewable electricity from generators across eastern and southern Australia.

"While our connection to the National Electricity Market means we don't have concerns about future supply, the ACT government recognises that low-cost energy storage is the missing link in the transition to a 100% renewable national electricity market," says Phillips.

He added: "The ACT is determined to play its part in developing this emerging industry while capturing the benefits for households, businesses and research and trades training institutions. Next generation renewable energy which incorporates energy storage will address any energy intermittency issues. It will also allow for ageing greenhouse gas intensive coal and gas-fired power stations to be retired."

Going through the rounds

ACT's Next Generation Energy Storage Grants Program began in 2016 with the government awarding three bursaries of $200,000 each to install subsidised battery storage in around 200 Canberra homes and businesses in a pilot scheme.

The purpose of the pilot scheme was to test the battery storage market and find out how well industry could respond to requirements of the programme. It also sought to determine the requirements for the effective and safe installation of batteries in ACT homes and businesses, and how best to encourage participation in the programme and allow for innovation in the industry.

Following the completion of the pilot, a further round of grants were awarded on 29 August 2016. In the second round, the government awarded $2m in total funding to eight companies through a competitive grants process. This round was aimed at providing subsidised battery storage for around another 600 Canberra homes and businesses by 31 August 2017.

The latest grants round had similar requirements to the Next Generation Energy Storage Pilot, but included obligations that will benefit the local economy, such as battery providers having an office in Canberra for local sales and support.

A range of technologies

A broad range of technologies and battery chemistries have been offered by the installers under the programme. However, the key focus is to support smart battery management capabilities. The programme has offered consumers innovative battery control systems, allowing them to best meet their needs and maximise the consumption of electricity produced from solar PV. In some cases they even provide customers with profit by allowing them to export electricity to the grid at peak times when wholesale prices are high.

As part of the programme, data is being captured from each battery system installed under the scheme. It includes one-off static data, such as name, address and installation information, as well as operational data such as the amount of power being generated or exported from the system, which will be captured at intervals of one to five minutes. This data will be made available for research and development, once people's personal information has been removed. The database will be one of the largest of its type in the world.

Keeping the momentum

With the pilot successfully concluded and the second round of funding under way, the ACT government is keen to keep the momentum going.

"The second round of funding aims to build on the success of the pilot, continue the momentum of the programme, and to expand on the local industry development objectives of the programme," Phillips said. "This round has recently been extended until 31 December 2017, and the ACT government is currently considering how and when a further grants round should be conducted."